GigaOM’s big mobile event, Mobilize, will be coming to San Francisco on September 26th and 27th. There, industry luminaries and our analysts and writers will look at the new opportunities presented by the intersection of cloud computing and the mobile Web. Here at Pro we’re compiling an anthology of analysis on mobile topics including platforms, advertising, commerce and payments. Keep an eye out for our coverage.

While you’re at the conference, be sure to save time to meet with some of our GigaOM Pro analysts. Bob Egan, JP Finnell, Phil Hendrix, Laurie Lamberth, Chetan Sharma and others will be there. They will be doing interviews and panels onstage, and they’ll be networking between sessions. Research VP Mike Wolf and I will also be around. Track the Pro team down and ask us your toughest questions.

The Pro team will be hanging out at the GigaOM Pro booth and at the cocktail events, and we’d love to chat about GigaOM Pro or anything else on your mind. We are always looking to hear from our subscribers about how we can better supply you with the info and analysis you need to make critical business decisions. So be sure to swing by the Pro booth and say hello.

Social games and app developers got a bit of a shock when Facebook snuck in some platform policy changes last week. Facebook rewrote some rules: forbidding cross-promotion to competitive social networks and tightening up the use of sponsorships that use virtual currency, the big revenue source for most games. What does this mean for apps and games developers trying to gain an audience and revenue stream from Facebook?

So what can an app developer do to get the most out of Facebook and insulate itself as much as possible from Facebook’s policy changes? Build its own site. Yes, in all likelihood, most of the activity around the app will come within Facebook, but an app can promote its own site and use a site to multiply revenue opportunities for several reasons:

Given Facebook’s strict controls over its Credits, it is unlikely that an app site could bring in its own or alternative virtual currencies and integrate them with Facebook’s via some kind of currency exchange marketplace. However, an app site could offer richer advertising opportunities (branded sponsorships, video ads, coupons) on its site than it could inside its Facebook app. And a developer could provide in-app placement on its Facebook app the way, for example, that Electronic Arts’ new Sims app integrated Dunkin’ Donuts, which could complement and drive traffic to a site sponsorship.

Opportunities for new platforms?

When Facebook reversed an earlier policy and opened up user comments on company pages run by pharmaceutical companies, many were caught by surprise and chose to shut down their pages to avoid compliance and regulatory issues. Facebook risks getting a Twitter-like reputation for inconsistency in managing its platform and API usage policies, or at least being justly accused of a lack of transparency or clarity. Could this open up opportunities for competing social networking platforms?

Facebook and Google handle group management quite differently. Understanding their strategies will help competitors and partners gauge one another’s chances for success and identify opportunities for complementary products and services.

Differing approaches

Facebook refined Groups last October; its previous Lists approach suffered from a low 5 percent adoption. Facebook wanted Groups to facilitate focused sharing and communications, while Lists would remain as a news-feed filter for power users. Facebook made Groups a two-way membership dependent on invitations. Besides assuring common membership, that tactic was geared to jump-start adoption by harnessing behavior similar to photo tagging, where a minority of participants does all the work.

Google’s Circles is easier to use and better integrated than Facebook’s options, and it functions as both filters and focused sharing/messaging. Since Google is starting from scratch, it has the advantage of practically forcing users into setting up Circles upon sign-in. But Circles is not reciprocal: While a user can follow contacts à la Twitter without requiring a two-way relationship, there’s no easy mechanism for creating single groups with common membership.

In the end, organizing the masses on social networks into relevant groups will probably take big-data analysis that produces auto-suggestions that users can apply. That kind of approach may be coming soon. Similar types of sorting for relevance are well under way, with Google an early innovator.

Google makes its living analyzing relevance and has proven its capabilities with search results. It’s starting to demonstrate expertise in social relevance via its Gmail priority inbox, though its social search efforts may be stymied by the expiration of its Twitter data licensing. And Facebook applies its own EdgeRank algorithm to sort users’ news feeds by relevance. Users’ results may vary. I’d bet on Google getting group relevance right, but then again, Facebook has a lot of social graph data and plenty of money to hire scientists.

I’m surprised Google+ doesn’t pre-populate Circles already, although perhaps Google fears that that would creep people out. It could test reactions by offering the feature to existing priority inbox users. Likewise, Facebook automatically suggests adding members to Lists, but, oddly, not to Groups.

What kind of opportunities does that leave for third parties? Consider the following:

As noted, Google has advantages in defining groups, due to its existing expertise and the fact that it doesn’t have to retrofit a solution. But there’s already a hack to “Circle-ize” Facebook Groups. If either approach gains momentum, the other will no doubt copy it. Let the games begin.

BusinessWeek’s cover story on the fall of Myspace blames the usual reasons: Rupert Murdoch lost interest, Myspace got a rep for sleaziness, it went through a crippling technology transition and users lost interest and migrated en masse to Facebook. Other critics fall back on the tired idea that Myspace’s do-it-yourself design led to garish personal pages that scared away mainstream users.

The real story? Myspace was done in by technology and business model failures that Facebook is explicitly countering. Google’s social strategy is less clear. Although Myspace embraced third-party developers’ apps and widgets, it never built out a robust technology platform of APIs and services they could use, let alone syndicate across other sites. And Myspace signed an initially lucrative advertising deal with Google that distracted it from cultivating relationships with “classier” advertisers instead of cheesy direct marketers, and from building out innovative social marketing programs.

Not every online media business has to be a platform, but an ambitious social network does, and it can’t ease up on the innovation pace. Myspace was never a very connected network: it focused on self-expression at the expense of communication and everyone “was in your extended network.” More like Geocities than Friendster, Myspace only recently adopted a feed-based UI.

Meanwhile, some of Google’s social impetus is defensive, geared to protect its paid search business by ensuring access to social “signals” for ranking search results. While it’s currently unconnected to Google+, YouTube counts as social media and is signing big deals with premiere advertisers and experimenting aggressively with video ad formats. Unlike Facebook’s social platform, Google’s search, maps and mobile platforms offer its ecosystem a ready-made revenue stream from Google’s ad networks, a boon for developer relationships and lock-in. Presumably, Google will offer that for its social platform. I’d give Facebook an A for its social tech platform and a B- for its social media business model. Google gets an incomplete on both fronts.

Myspace doesn’t seem poised to regain much past glory. Under Specific, it could survive as a low-cost, medium-sized entertainment portal. It still gets about 30 to 35 million monthly users in the U.S. and has fairly strong relationships with the music industry and Hollywood. If it works hard on sponsorships and can secure access to some entertainment exclusives, it may be able to overcome the baggage of its tarnished brand.

Question of the week

Why did Myspace fail, and what does that imply for Facebook and Google+?

Apple’s iOS 5, unveiled at WWDC last week, showcases a deep integration of Twitter in many Apple functions, which suggests that Apple anointed the company as its key supplier of social technology infrastructure. What does this mean for social media? The budding partnership could very well shake up the standings in social platforms and do some damage to Google’s attempts to spread its own social technologies, like its +1 button.

Apple is one of those companies, like Google, where one wonders if it has any real social DNA. But with Twitter, Apple acknowledges the cross-platform necessity of social communications. That’s a step in the right direction. Leading with Twitter is a smart way to pick up its pace in the social media arena.

Apple’s iOS 5 showcases Twitter integration in many Apple functions: camera, photos, the Safari browser, two Google-based apps (Maps and YouTube), contact management and unified sign-on. Apple also said third-party applications developers would be able to tap into Twitter APIs to do their own integration. Apple showed one-click tweeting for photos and link-sharing via Twitter with its usual flair for slick and easy user experiences. Oddly, Twitter is missing in both email and Apple’s iPhone music app, and Apple said nothing about integrating Twitter into its desktop OS.

Yet at the WWDC, Apple introduced a proprietary iOS-only messaging service that lacks Twitter. And it swapped out a Ping button — a link to its iTunes store–centric social network — from its mobile music app for a “recent purchases” synchronization feature, rather than a music discovery aid like a “tweet this song” button. If Apple is getting social, it’s getting there by incremental steps. But there’s no question the Apple/Twitter combination is gaining momentum against social platform incumbent Facebook and wannabe Google.

Apple/Twitter to reshape social platforms?

Recently Google executive chairman Eric Schmidt smartly identified a “gang of four” companies leading consumer technology platforms: Amazon, Apple, Facebook and Google. But one of Schmidt’s two other contenders for “gang” status was Twitter. (The other was PayPal.) No Microsoft on Google’s radar — oh, no, not at all. Microsoft has a pretty solid relationship with Facebook, so the social platform landscape is shaping up as a showdown among Microsoft/Facebook, Apple/Twitter and Google, with Google looking lonely.

Web navigation. Google still dominates through search, but Facebook’s ubiquitous Likes are growing as a source of traffic for content sites. Until now, Twitter has had a much smaller role, but Apple’s integration should increase Twitter use dramatically and drive up its importance in navigation. That could squeeze out Google’s Like competitor, +1, leaving it to extract needed social “signals” for search ranking from third parties. Facebook won’t let Google mine its data, and Twitter’s current generosity in licensing to Google could change.

Mobile social networks. Google’s strength in mobile operating systems should be its best launchpad for social initiatives. Yet the company is lagging behind; for example, +1 is present in the Android app marketplace but not in Android itself. Meanwhile, there may never be a Facebook phone, but its app is hugely popular on iOS and Android. With Twitter one click away from so many Apple sharing functions, Facebook could lose ground with iPhone users. Facebook’s installed base will be tough to displace, but Apple’s new favorite mobile social network just gained new life.

Net impact? Apple is now a serious contender to set social technology standards. Google’s core position in search remains solid, but its already weak social efforts (Buzz, +1, its “layered” social approach) now look even weaker. As for Facebook, it still dominates social technology. But keep an eye on photo- and link-sharing behavior for any early indicators of pro-Twitter movement.

Part of the excitement driving LinkedIn’s IPO last week comes from investors associating social media with network effects. You know, the principle that the value of a network increases dramatically with the number of its participants. That’s the engine that drove Windows and eBay, not to mention the public telephone network. Markets with network effects tend to have explosive growth and can end up with winner-take-all market share.

But not all effects are equal, and assessing the valuations and competitive positions of social media companies depends on knowing which network effects are actually at work and how those could play out.

Types of Network Effects in Social Media

Pascal-Emmanuel Gobry wrote a thoughtful piece on network effects last week for Business Insider; it includes some analysis on how companies focused on market niches eat away at generalists who benefit from network effects. And as Matthew Ingram notes, network effects can work go ways: For example, Facebook supplanted MySpace, which supplanted Friendster.

Looking closer, there are several different types of network effects that work in social media:

Viral growth: LinkedIn and Facebook initially grew their networks the old-fashioned way: Users invited other users to join. Viral pass-along is a key growth driver for social commerce and games, but now services and apps can hitch a ride on existing social networks, leveling what was once a steep playing field.

Business model that reinforces the effects: Gobry’s wrong about Google. While there are minimal network effects for its search users, there are huge ones for its advertising network. Google’s $25 billion in extremely profitable search advertising depends on attracting advertisers to its dominant search audience and insuring a liquid marketplace via bidding and enforced relevance to create an unbeatable paid search business. Plus Google lets developers using its services and APIs tap into that revenue stream with minimal effort.

Participant lock-in:Technology platforms create positive business opportunities for developers. But they can also achieve customer lock-in for their originator by making those same developers dependent on APIs. End users can be locked in, too, via familiarity (e.g., the QWERTY keyboard) and data storage (e.g., contact info, photos, message repositories) that raise switching costs for members.

Source: GigaOM Pro

As illustrated in the table above, here’s how network effects are shaping competition in selected social media markets:

Social graph: Though there are network effects aplenty, consumers tend to belong to multiple networks (Facebook, Twitter, Foursquare), meaning would-be data miners must target multiple data sources. And the industry is only just beginning to harness that collection of big data into reliable revenue streams.

Likes and log-in networks: Facebook was smart to hang Likes and Sign-ins off its Connect network, as each feature complements the others and assists in distribution; now LinkedIn and Google are trying to do the same. Bolting an ad network on top of those networks could provide missing revenue reinforcement.

Social commerce: As noted, most social commerce is more scalar than social. Without the additional services for consumers and merchants previously mentioned, single-market entry barriers and switching costs will remain low.

Unified communications: A cross-channel communications hub would sponsor habitual consumer usage. But so far, interoperability requirements have restrained the potential to lock in customers.

Social games: Many social games don’t depend on competition between users to be fun. Facebook’s distribution channel and cross-vendor virtual currency enforce interoperability — that’s good for growth but bad for Zynga’s or Playdom’s user lock-in.

Based on that framework, Facebook is well-positioned to build on its influence and add revenue streams. Its platform is a legitimate beneficiary of network effects, even in the face of competition from tech worthies (Google) and startups. LinkedIn has a solid business, but its platform aspirations remain just that: aspirations. Besides viral growth and some network utility, it’s not clear that other social networks (Twitter, Foursquare, Instagram) have network effects behind them.

Facebook’s silly scheme to plant anti-Google privacy stories further highlights the bitter rivalry between the two companies, but it also points at what they’re really fighting over. The competition is not so much about each company’s core business — search vs. advertising-powered social networking — as it is about future products and services, and each company’s respective role as a technology platform provider. And potential partners and competitors need to know which battles these two competitors will take seriously so they can adjust their own priorities and investments.

Here are the key areas of competition for Facebook and Google:

The “interest graph:” In contrast to a social graph of information about relationships between people, an interest graph based on topics might actually be a better indicator of purchase intent than what friends — who may not have similar tastes — like. Facebook Likes and Google search results feed such a graph — though Twitter may have more easily collectible info here than either.

Communications: It’s unlikely social media will completely replace email, but both Google and Facebook are competing to be a user’s unified communications hub by integrating mail, chat and posts with contact lists and presence management. Such a hub would generate constant use and potential customer lock-in, and be a rich source of contact data.

Identity management/authentication: Facebook tries to enforce a single, authentic user identity, but it isn’t very good at letting that user manage his relationships between different types of friends or groups. Google does offer a sign-on service, but its Profiles are mostly for search personalization. Authenticated identities could play a big role in payments systems and professional/career relationships.

Ad networks: Google ad networks dominate search and are strong in direct-marketing display. In theory, Facebook’s Like network could serve context- and behavior-based advertising on sites web-wide. Facebook’s complaint that Google scrapes social information without explicit permission might be based on potential privacy legislation. One bill under consideration would give companies with formal consumer relationships more freedom to use data for advertising. That would give a company like Facebook an advantage over third-party ad networks.

Build, Buy or License?

Facebook doesn’t seem interested in building a conventional search engine, but Google sure is trying to build out some Facebook-like technologies. Google recently introduced +1, a competitor to Facebook Likes, where users recommend search results, ads and, eventually, web pages. Website owners will no doubt flock to +1 for its potential influence on Google search ranking. But, faced with yet another link-sharing option, users may ignore +1, especially since Google lacks an established equivalent of Facebook’s news feed to display links.

Since they don’t like partnerships, how about acquisitions? Business Insider has a laundry list for Google, but two are big and might also appeal to Facebook:

Twitter: Either company’s ad business could instantly monetize Twitter better than Twitter can itself. But neither may need to buy into Twitter, as it seems pretty easy to get access to Twitter data.

LinkedIn: The professional social network is stingier about sharing data, has a working business model and could play an important role in identity authentication. But it’s about to go public, so would-be acquirers would have to act fast.

Last week, LinkedIn unveiled an upgraded version of its platform to developers. The professional social network has tried to establish itself as a platform with open APIs and services for third parties since 2009, not to simply to copy Facebook, but to confirm itself as the source for professional profiles, both for people and companies. With 100 million users and an upcoming IPO, what are its chances of LinkedIn sealing up this role?

The new platform release is based on Javascript APIs, which should make platform services faster and more developer-friendly. It supports OAuth 2.0 for better authentication integration with other sign-in services whether they’re home-grown or from Twitter, Facebook or Google. The new release offers a handful of plug-ins supporting sign-in, link-sharing and recommending, and ways to pull up snippets or full profiles of LinkedIn users and companies. Yes, it sounds a lot like Facebook Connect, though LinkedIn isn’t constructing a comments network. LinkedIn’s users aren’t “Liking” or sharing as they do on Facebook — yet — but LinkedIn profiles contain valuable professional information (job title, history, expertise), and its data about company connections are much richer than Facebook’s.

What LinkedIn Is Trying to Do

Notice that I’m emphasizing off-site connectivity and information distribution, rather than platform features for apps that live within the LinkedIn site. That’s because LinkedIn is framing this release as such. The network does support apps, and LinkedIn doesn’t have many of those, since it works closely with select companies rather than encouraging open development. The current roster is a mix of professional productivity tools (SlideShare, Box.net, Tripit, SAP Community) and communications/news (Twitter, legal and real estate updates).

No, this release is about helping other sites harness LinkedIn’s users and their information in the hopes that off-site activity will drive users back to LinkedIn for increased engagement. If a news site, for example, used the API, a user could see a contextually related tweet from someone in his LinkedIn network; he might then be inspired to go to LinkedIn to dig deeper using LinkedIn Signal to filter other tweets by industry, geography, etc. Now, unlike Twitter, LinkedIn doesn’t have much content to syndicate. Nor do LinkedIn users create a constant flow of communications that drives traffic to other sites the way Facebook’s have. And LinkedIn expressly forbids API users to use profile information for marketing or advertising targeting.

LinkedIn’s Best Platform Angles

So how can LinkedIn convince other companies to use its API platform?

The network’s company profiles are more interesting for their connection info than for their content. Introduced last fall, LinkedIn company pages feature basic info that LinkedIn scrapes from the outside world like headlines, stock/finance data and maps. So third-party developers will be more interested in using the LinkedIn plug-ins and API to display person-to-company relationships. Sites about products, news and real estate, for example, could offer their mouse-over information bites useful for sales leads, job-seeking and network-building.

But LinkedIn’s best opportunity is to turn users’ professional profiles into “identities” — the equivalent of a user’s digital business card, but with trusted authentication behind it. So third-party sites will find LinkedIn’s authenticated sign-in plug-in the most appealing new feature. An individual that wants to maintain a professional persona as well as a personal one has likely set up two networks, one on Facebook for casual communications and photo-sharing and another on LinkedIn.

To lock in and expand its role as professional profile of choice, LinkedIn should:

Evangelize the professional identity angle, starting with sign-ins at sites for business content, travel and gadgets; share user “ownership” and data (with the user’s permission) more liberally than Facebook or Apple.

Do the same with Salesforce.com and enterprise collaboration companies.

Build relationships with site development agencies to incent companies to beef up their LinkedIn pages; consider offering limited-time free ads or job listings/searches to sweeten the pot.

Dorsey laid out some of his early thinking at a Columbia University appearance. He conceded Twitter needs to be clear about its platform and product direction, and advised third-party Twitter developers to stay away from mainstream client apps. Rather, they should focus on integrating technologies like geolocation, recommendations, filters and mobile sensors. Actually, Dorsey acknowledged that Twitter client maker TweetDeck was great for a minority of high-value Twitter power users. Twitter itself, he said, should focus on attracting and serving more mainstream users — the ones that are consumers of Twitter content rather than creators.

Twitter’s history leads it to focus too much on connecting users to other users, rather than users to topics. Its first-screen promotions to “see who’s here” and view “Top Tweets” link to people or brands, or to individual tweets. Popular “Trends” displayed through a local filter on a user’s personal page is more topical, and more in line with mainstream online media approaches, where current headlines, “most popular” and local news/weather/events lead. Mass sites tell me “most popular” is far more effective in generating clicks than “related items.” Dorsey should prioritize collaborative filtering over complicated content management taxonomies.

But Twitter should also collect channels of topics to help unsophisticated users follow more relevant feeds. Twitter already partners with Sulia to deliver curated topic channels to other media companies based on Sulia’s editorial and algorithmic analysis of expert content. It should use those topic and time-driven channels itself. Twitter could promote recommendations with a smarter version of Twitscoop’s real-time topic cloud.

In theory, the site takeover approach of a Trend could mimic timely, mass-reach advertising used by portals like Yahoo and AOL to great success for movie studios and holiday-themed sales. But a Promoted Trend now is a barely highlighted little text unit. Twitter’s attempt to feature it on the QuickBar attracted derision from digerati, who complained of its lack of relevance (and who probably use TweetDeck on their desktops, anyway). A smarter play would be a flashier ad unit on the Twitter.com site, where mainstream users congregate.

Better contextual targeting could alleviate some of the complaints about relevance. (Promoted Tweets show up as a result of Twitter searches.) If Twitter doesn’t want to manage a targeted ad marketplace, it could draw on the expertise of OneRiot, a company that’s trying to build a real-time ad network for other Twitter clients.

The increasing dominance of Facebook, and the fading of other sites like MySpace and Classmates.com, makes me wonder about the concept of one ruling social network. Human beings, after all, naturally belong to a variety of networks based on different contexts like shared interests, work, school, geography and the like. So it seems logical that there is room for specialized or niche social networks oriented around those specific groups or activities.

Three things make me think so:

A handful of social networks delivering specialized functions have big audiences.

Facebook’s effort to add specialization to its network is immature.

Other networks can harness social services through open APIs — if they’re careful.

Facebook’s flaws give niche social networks a chance.

Social networks enable their users to share information and experiences through conventions like personal profiles, linked contacts and real-time feeds of communications and status updates. But companies have gained large audiences using social networking techniques to deliver focused communications without the help of actual social networks like Facebook or MySpace. Examples include Twitter (175 million micro-bloggers and readers), LinkedIn (90 million users of professional and career-oriented contacts), Foursquare (6 million users doing location-based check-ins) and Instagram (2 million mobile photo sharers).

Meanwhile, Facebook’s own attempt to deliver niche networks within its own general-purpose network is Groups. The company revamped its Groups service last October. The service lets users create subsets of their contact networks in the hopes they will create things like family photo albums and local soccer clubs. But Groups isolates communications and activities within a group, rather than filtering them. That means users must duplicate their efforts if they want to share across groups. And Groups isn’t open to marketers or advertisers, even though activities on the service are often more desirable for campaign targeting.

Managing an open API ecosystem has its risks.

At the same time Facebook’s solution to niche social networks is incomplete, it is providing companies and apps developers APIs and services to build their own, like BranchOut‘s career network within Facebook. To be sure, it can be risky to depend on another company’s platform. Last week, Twitter locked out UberMedia and TwapperKeeper for using unapproved URL shorteners, and for archiving and re-licensing data without an official Twitter deal. Last year, Facebook and Google blocked each other from harvesting contacts, and Apple had to remove Facebook connectivity from its Ping social network due to the “onerous terms” Facebook wanted as compensation for Apple’s presumed heavy usage. The takeaway: Specialist social networks should negotiate before implementing.

Hunch co-founder Chris Dixon suggests that developers should trust platform companies who are open with their product roadmaps, or at least exhibit predictable strategies. Platforms without established revenues, such as Twitter or Foursquare are less transparent. Compared with them, for instance, Facebook’s business model is clear: It sells advertising and collects a percentage of spending on virtual goods via its Credits system, and usually only bullies big competitors.

Companies should use Facebook and the others for customer acquisition, then ease off technology dependencies. For example, use Facebook log-in initially, and then migrate users to an OAuth-based process later by suggesting they update their password for security. After importing social graph data, build up your own database of friend connections by tracking specialized communications.